From the Home Office

Reprinted from the Fall 2017/Winter 2018 issue of the Authors Guild Bulletin.

Dear Authors Guild Members,

As executive director of the Guild, I speak at many different kinds of venues, including, on occasion, academic conferences. Although these last are not as obviously related to the work of the Guild, I always enjoy scholarly symposia and find them useful. They take me out of our day-to-day advocacy work and the practical limitations of real life, into the world of ideas and the possible, and that always gets me thinking: What if . . . ?

One particularly thought-provoking conference I spoke at last fall was Columbia Law School’s Kernochan Center’s symposium, “Exploring International Copy-right’s Gaps and Flexibilities.” My fellow panelists and I were asked to speak about how authors can be given more of the benefits of copyright within the current international copyright framework — the Berne Conven-tion[1]. The question posed was: “Author-unfavorable outcomes may not be surprising, given both authors’ weaker bargaining position and the enormous changes to business models, creative practice and consumer behavior . . . but what room do [the international Berne norms] allow to improve the economic returns to authors?” In other words, what types of changes could be made within the basic structure of copyright law that would ensure that more of the benefits flowed to authors, and to the companies that publish and distribute their creative works?

Following the basic Berne structure, all contemporary copyright laws have this in common: Authors are at the center of the copyright equation. Copyright — the right to exclude others from using your work — is an author’s right. It vests with the author on creation. Yet, authors are rarely at the center of the money flow or control of the work.

We put up with it because if an author wants to monetize her work, she usually needs to cede some rights to a third party, such as a publisher or, these days, a self-publishing platform. In that initial transaction —
the author’s grant of rights to a third party — the author often loses control and much of the benefit of her work. Authors, even best-selling authors, have surprisingly little leverage to shape the terms of their deals; publishing contracts look pretty much the same for everyone, except around the margins and they have been that way for at least a century. In the case of self-publishing platforms, authors must click “Accept” on take-it-or-leave-it terms, which are rarely author-favorable.

Generally speaking, authors get the dribs and drabs: what is left over after everyone else — the wholesaler, the retailer or online distributor, the printer, Amazon, the publisher — have taken their share. We think it is standard because we are used to it — that an author might get only $2 to $3 from a hardcover book that sold at $25, and far less for an e-book that retails at $9.99; and much less for bundled products and deeply discounted books. But should it be?

Under most publishing agreements, the author has no control over how his book is sold, to whom and at what price. The publisher may end up selling most books to big box companies and Amazon at deep discounts, for which the author is paid minimal or no royalties. The publisher might allow returned copies to slip back into the stream of commerce, to be sold on Amazon in place of royalty-bearing books. If you think about the fact that copyright is first and foremost an author’s right — and that has been true since the 1710 Statute of Anne, the first copyright statute — it is confounding that authors have so little control and remain at the bottom of the money chain.

Needless to say, I was intrigued by the question posed to the panel: How can we turn this around? How can we put authors back at the center of the copyright equation? How can we give authors more control over their works and the power to receive more of the profit from their books themselves? These questions are always at the top of our minds at the Guild, but we usually constrain our thinking to the pragmatic: what is politically feasible, what will publishers agree to, what can we do around the edges to make contracts more favorable to authors? How can we help them enforce their rights?

So, it was a rare treat for me to pull back from our day-to-day problem solving and spend some time thinking about what could be, without regard to political feasibility: what changes could we make to our law to more successfully protect authors? Here is a summary of some of the issues I spoke about.

Collective BargainingThe longer I am in this job, the clearer the need for authors to collectively bargain becomes. Contracts will not fundamentally change until authors can stand together. Individual authors by and large have little to no bargaining power. If you say no to an offer, there is always someone else behind you ready and willing to sign. Authors and their agents need to be able to say, “No, those terms are not okay,” without fear of losing the contract. It is difficult to see that day arriving without the ability to collectively bargain. Authors and other freelancers are prevented from negotiating as a group by our antitrust laws. The law treats freelance authors as independent businesses that compete with one another. There is an exemption to antitrust rules for unions, but under our federal labor laws, only employees, not freelancers, can unionize. One of my dreams is to convince Congress that creators should have the same right that employees have, to unionize and bargain collectively without running afoul of antitrust laws.

Requirement for Fair or Reasonable CompensationGermany and the Netherlands have an un-waivable right to “adequate” or “reasonable” remuneration, as part of their copyright laws. The laws require that in all cases authors be paid “adequate” or reasonable compensation in exchange for the right to publish. It would be a tremendous help to authors to have such a provision in the U.S. copyright law. It would give authors a little more bargaining power, in that the conversation would start with what is adequate or reasonable in light of the circumstances. It would also take “free” off the table, making it impossible for publications like the Huffington Post to make vast sums off their writers and yet pay them nothing. U.S. law has a strong bias against interfering with the right to contract freely, but given authors’ unequal bargaining position, freedom to negotiate is often more myth than reality. While it might prove difficult to determine what is adequate, fair or reasonable in any given case, there are ways to create fair standards and make it workable, as has been done in the Netherlands and Germany.

Termination Rights after 20 YearsThe 1976 Copyright Act gives creators and their heirs the right to terminate any grants they made 35 to 40 years after they signed off. (This is true for grants made from 1978 on; other rules apply to pre-1978 works). This means that if you signed a publishing agreement in 1985 you can get your rights back during the window of 2020–2025 (with at least two years’ notice to the publisher or other grantee.) That, however, is much too late for most authors to maximize the value of their work, and it is significantly longer than the publisher needs to recoup its investment. For most titles, the publisher has finished selling in any numbers within a few years. After that point, it makes no financial sense for the publisher to invest any money in those books, and they don’t. The author, by contrast, has every incentive to get every last cent and read out of the book, and it makes more economic sense to give the author her rights back than to leave them unexercised in the publisher’s hands.

Moreover, a termination right that is several decades in the future provides authors no additional incentive to write and publish. Few creators are motivated by what might happen in 35 years. So, for starters, I’d like to see the termination provision in section 203 of the Copyright Act amended so that rights can be terminated after 20 years, at least for books. Twenty years is plenty of time for the publisher to recoup its investment and make a fair profit.

Use It or Lose It Copyright ProvisionsFor similar reasons, I would like to see a “use it or lose it” provision enacted that would apply to licensees and transferees. Where a termination right applies to all grants, regardless of whether the publisher is still exploiting the work, these types of laws provide that if a licensee or assignee of copyright is not actively exploiting the rights to a work, they lose those rights. The public has an interest in ensuring the works are available and so does the creator.

Most U.S. publishers do provide this kind of “reversion” right in their standard contracts — at least in theory. But many of these reversion clauses are not working well today. The traditional reversion clause typically says that if a book goes “out of print” and the author notifies the publisher, if the publisher does not bring the book back within six months, the author gets the rights back. “Out of print” has any number of definitions. Traditionally, it meant that the book was no longer kept in stock. But those clauses no longer work, since publishers can keep books “in print” by making them available as e-Books and POD. When an author asks for her rights back, the publisher, who often is doing nothing with the book, refuses, usually because it is possible that someday someone will discover the book . . . and maybe make a movie. (To be fair, some publishers are better about rights reversion than others.) And, even when the contract provisions allow for the author to get her rights back, it can take months and many reminders to get that signed piece of paper back from the publisher that makes it official.

From a policy perspective, the fact that a publisher is keeping the book out of circulation is a problem. While the publisher feels it cannot make enough of a profit from a title to justify investing in any marketing — and doing so might compete with its current list — the author could be making money on the book. The author could repurpose it, update it, or sell it to another publisher. Today’s authors can self-publish a book that does not have enough market for a publisher to care about. Even if they make only a few hundred or a thousand dollars, that is real money to the author. And she gets control back.

To correct this problem, I would like to see an automatic “use it lose it” reversion of rights provision in copyright law that applies to all transferees. If rights have not been exploited for a year, or were never exploited within two years of a grant, then the author automatically gets the rights back. It should apply to all contracts retroactively, so that no publishers can hold a book up and keep it out of circulation. The law would apply to rights grants in a single contract on an individual basis (e.g., print, eBook, audio book, foreign rights). Any rights that are not exploited within two years after they are granted should revert automatically to the author. The copyright laws of Belgium, France, Spain and Sweden all have some version of a rescission right for failure to keep a work in commerce or to exploit certain rights within a set time-period.

Collective LicensingThe Guild has long recommended establishing collective licensing for out of print books. Under U.S. law the only way to use out of print books is to find and contact the authors and publishers and clear rights on a case by case basis — which many users have complained is too hard to do. So, instead of seeking permission, users rely on the “fair use” exception to copyright, and courts are sympathetic because they believe that obtaining all those permissions would be near impossible. (It isn’t: The Authors’ Registry locates the vast majority of authors in less than 10 minutes.)

A collective licensing scheme would undoubtedly benefit the public and authors. A true digital library could be created, and authors, publishers and other rights-holders could all be reasonably compensated if they wanted to participate. This would ensure that entire books, not just snippets, could be read online, thereby bringing millions of out-of-commerce books to the readers and researchers who need them most. Readers and researchers have moved online, but older, out of print books have not. If these books are not made digitally available, their usefulness and the accumulated knowledge they hold are at risk.

Library and user groups say they would rather rely on fair use, although there is no basis in the law for providing more than a small excerpt to users right now. The Internet sector and library groups continue to push hard for the ability to digitize and display full texts for out of print works under fair use. They argue that it is important to provide public access to what they like to refer to as “dusty musties,” arguing that since no one is making money from them anyway, they should be freely available under fair use. Instead it is imperative that we allow these books to be available and for their authors to control and profit from them if they choose. This can be facilitated through collective licensing.

TaxesIn an ideal world, U.S. authors would receive more favorable tax treatment than they currently do. Authors should be entitled to income average, as was the case — until the tax reforms of 1986 — so that advances get paid at a rate that reflects the fact that the advance is the author’s livelihood for a period of years.

Also, authors should not have to pay a self-employment tax; while it might make sense for some independent contractors, authors are providing a benefit to society and should not be forced to pay extra tax because they are not full-time employees. Finally, I would like to see authors have a tax exemption for tax on the first $30–50,000 of income as they have in Ireland. (I know, especially given the recent tax bills, I am really not holding my breath on this one.) Ireland, for instance, exempts the first €50,000 of income from the sale of artistic works, including books.

So that’s my list for now. In an ideal world, what changes to the laws affecting authors would you like to see? Let’s step out of the mire for a moment and ask: What would make the world a better place for authors, books and readers?

Then let’s start talking about those ideas, because the more we talk about them the less implausible they will sound. The more people hear about ideas, the more normal and even natural they become. Because no matter how technology progresses, there is no better form of learning, of putting yourself in another’s shoes, of acquiring knowledge, than reading a book.

Onwards,
Mary Rasenberger
Executive Director

[1] The Berne Convention dates to 1886; the U.S. signed on to it in 1989

The Authors Guild is the nation's professional organization for writers, aiding and protecting author's interest in copyright, fair contracts, and free expression since 1912.